State Tax Commission v. Englar

Bowo, C. J., delivered the opinion of the Court. This case is similar in its essential points to that of Mayor and City Council of Baltimore et al. v. Harper ( 148 Md. 234 ), just decided. The question here, too, is whether a mortgage participation certificate is taxable as a certificate of indebtedness or evidence of debt of a corporation, not exempted by law, under article1 81, section 214 of the Maryland Code. The certificate to be considered here is not identical in terms with that considered in the Harper case.

It is issued by a corporation named tlie Mortgage Guarantee Company, and begins with an acknowledgment of receipt, from the appellee of one thousand dollars and “assigns to the purchaser an undivided share equal to that amount” in a mortgage; made by Archer’s laundry, I neen pointed, to the Mortgage Guarantee Company for $350,000. The dates and record references are given on the face of the eortifreatc. Then follow the clauses defining the agreement and the transaction: “The mortgage referred to is held by the company as depositary and agent for the purchasers of such certificates, which shall never aggregate more than the amount of principal remaining unpaid on said mort ²⁴⁸ gage, upon the following terms and conditions, which are agreed to by the purchaser of this certificate. “1. The company holds and shall continue to hold said mortgage, and the other instruments and evidences of title relating thereto, for the benefit of the purchaser and any other persons interested therein, and shall as agent for the purchaser and any other persons interested therein, collect the interest and principal of said mortgage when due. •“2.

The company upon receipt of the interest and principal of said mortgage shall distribute the same pro rata among the persons entitled thereto. The purchaser of this certificate to be entitled to receive of said interest on said mortgage, interest at the rate of five and one-half per cent., the balance of the mortgage interest to be retained by the